Activity vs. Impact Metrics (and why the difference matters)
“Lack of resources” is by far the number one challenge we hear about from executives and decision-makers. To justify more resources, executives inevitably need to demonstrate clear and meaningful impact to key stakeholders. My experience has been that many of them spend an exorbitant amount of time trying to measure anything and everything, but somehow often end up missing the mark.
The ability to prove impact is at the heart of both maximizing existing resources as well as justifying new ones. When we ask partners “what does success mean to you?” we often get a well-articulated mission or purpose statement, but less in the way of measurable, tangible metrics of impact.
Does this sound familiar? Take a look at the chart below and ask yourself, truthfully and earnestly, whether you and your team are spending time measuring activities or impact, and what you can do to transition from the former to the latter.
Measuring activity can provide value.
Measuring activity is incredibly important. It will help you understand efficiencies, and define better processes and frameworks. It will show you the parts of your team that are weaker or stronger than others. It will help you identify under and overperforming people, initiatives, and functions. It will help you see who and what is working, and what’s a waste of time.
But measuring impact matters more.
Activity metrics cannot substitute for measuring and demonstrating impact to your key stakeholders. Whether they are your board, your customers, your target audience, or your investors, your stakeholders usually care about and are able to remember only a handful of metrics that actually matter to them.
How can you separate between activity and impact metrics, to make sure your stakeholder reporting, measurement and communications hit the mark?
Answering the following questions is, from our experience, a really good place to start:
Understand the big picture- what is the organization's purpose and mission? Why do you exist?
Frame activities- Why do you do the work that you do? How does what you do result in change?
Map stakeholders- who are your stakeholders and what actually matters to them?
Create alignment- which activities relate to, or lead to the things stakeholders care about?
Storytelling- how are you going to tell a story that resonates with your stakeholders using the data?
Identify sources- where is the data that will feed impact KPIs coming from?
Data architecture- in what format, structure, and detail do you need the data?
Define platform- where are you going to aggregate multiple data sets from multiple sources?
Data management- how can you align and organize disparate and often messy data sets?
Communications- what formats, channels, and messages should you use to communicate your impact?